When shopping for a new home (and a new mortgage), it's best to work backwards-figure out how much you can afford to spend on your monthly mortgage payment and use that number to determine your ideal housing price point.
How do you come up with that monthly number? Well, one way is to go through your last three months' worth of bank statements, figure out what your spending habits are decide how much you could comfortably spend on housing. The other (quicker) option? Try the 40X rule .
The 40X rule is simple-and a calculation that's been used by New York City landlords for quite some time. Divide your annual salary by 40, and you'll end up with the approximate monthly payment you should be spending on your mortgage. Fiddling around with a mortgage calculator will help you translate that monthly number into a total mortgage amount-and, combined with your down payment, your housing price point.
While this isn't a foolproof method, it will give you a starting point to look for houses in your price range (and avoid disappointment when you find out that the multi-million dollar mansion you had your eye on is actually not in your budget).
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Wednesday, December 16, 2015
How to quickly find your ideal mortgage payment
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I wish the calculator would work :). I thinks it is really important to understand what is the Interest Rate and Annual Percentage Rate. The process and calculations are too complex that an expert should handle it. If you are buying a new property or refinancing, it is best to consult with Independent mortgage agent. But make sure you get all your doubts clear with your consultant before opting for anything.
ReplyDeleteHey Marcy, Thanks for such a nice post. If anyone is looking for a mortgage broker in Sydney, Talk to Active Mortgage. They will help you plan your smart purchase for a first home or investment.
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